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Post by theitalianleathersof on Dec 6, 2019 17:03:17 GMT
with risk free rates close to zero or negative, you cannot expect to invest in a >10% return without risk.
the main problem I see with UK platforms compared to EU one is that they also offer lousy returns, almost never above double digit: in this sense, you get lot of risk (they are start-up anyway) but not get compensated in returns.
I still believe in p2p investing but you have to do your homework, and be ready to stomach volatility, as per other type of investments that offer similar returns.
theitalianleathersofa.com
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zlb
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Post by zlb on Dec 10, 2019 22:29:19 GMT
Is it worth asking how the failed platforms differed to the ones that are still running? Or is the same tired old question about risk and return - and those with low returns aren't necessarily lower risk.
The number winding down now, is clearly alarming, but to me they were the ones which looked a bit dodgy, out of my league or trust (a pawn shop with paintings??) - although I was in Lendy, that was exhausting enough.
Which platforms ran out of borrowers or decent security, and why?
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Nomad
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Post by Nomad on Dec 24, 2019 20:40:35 GMT
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Post by gravitykillz on Dec 25, 2019 9:14:29 GMT
The information on this site is incorrect. It states lendinvest has stopped accepting private investors. Which is wrong they have not.
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mrk
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Post by mrk on Dec 25, 2019 9:38:08 GMT
The information on this site is incorrect. It states lendinvest has stopped accepting private investors. Which is wrong they have not. You're right, however they did restrict it to high net worth, investment professionals or “financially sophisticated” investors back in 2017.
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Post by stevepn on Dec 25, 2019 12:32:52 GMT
I think a lot of the problem with P2P has been cowboy companies building up their loan books knowing they were dodgy and that there are investors who will jump in and buy into any P2P for the sake of 2-3% above FSCS. There is no point in getting 10% interest if you lose 50% capital. It's a hard lesson to learn when it hits you.
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aju
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Post by aju on Dec 25, 2019 12:57:20 GMT
I think a lot of the problem with P2P has been cowboy companies building up their loan books knowing they were dodgy and that there are investors who will jump in and buy into any P2P for the sake of 2-3% above FSCS. There is no point in getting 10% interest if you lose 50% capital. It's a hard lesson to learn when it hits you.
here here!
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Post by gravitykillz on Dec 25, 2019 15:57:36 GMT
I think a lot of the problem with P2P has been cowboy companies building up their loan books knowing they were dodgy and that there are investors who will jump in and buy into any P2P for the sake of 2-3% above FSCS. There is no point in getting 10% interest if you lose 50% capital. It's a hard lesson to learn when it hits you.
Tell that to the funding circle thread.
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iren
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Post by iren on Dec 26, 2019 12:36:06 GMT
The problem with P2P is not loan risk. The vast majority of us understood that and expected that the results would not always be good.
The problem in P2P is structural: the lack of separation between the platform on which you purchase and trade, and the management of the underlying investment as a product. In P2P, the failure of some loans at a particular time, or the failure of a platform to manage its affairs or gain sufficient traction, are two parts of the same machine necessary for a successful investment, with the failure of either part leading to a high probability of a catastrophic result.
Not the same as buying shares/bonds/funds through a broker, where the risks are largely separated.
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Post by stuartassetzcapital on Dec 26, 2019 17:16:13 GMT
This is a very valid point iren. Firms with very detailed and well funded wind-down plans with with serious and well prepared partners for those wind-down plans are key to the risk being reduced back to principally loan risk. We have invested substantial sums in our own systems and also in the detailed plan with our wind-down partner RSM and we believe that this is a best in class plan. We expect this will be of great comfort to investors on top of our blanket property security policy on lending nowadays and 500+ loan diversification of the loan book. |
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Dec 26, 2019 18:19:42 GMT
This is a very valid point iren. Firms with very detailed and well funded wind-down plans with with serious and well prepared partners for those wind-down plans are key to the risk being reduced back to principally loan risk. We have invested substantial sums in our own systems and also in the detailed plan with our wind-down partner RSM and we believe that this is a best in class plan. We expect this will be of great comfort to investors on top of our blanket property security policy on lending nowadays and 500+ loan diversification of the loan book. I'd be more confident if I could see the loan agreements, security agreements & all other legal paperwork defining relationships between lenders, borrowers, platform agent & security agent. As has just been discovered with a number of platforms the nasty devils are in the detail. Oh & I'm not sure the involvement of RSM is particular selling point amongst many forum members.
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zlb
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Post by zlb on Dec 26, 2019 20:27:44 GMT
This is a very valid point iren. Firms with very detailed and well funded wind-down plans with with serious and well prepared partners for those wind-down plans are key to the risk being reduced back to principally loan risk. We have invested substantial sums in our own systems and also in the detailed plan with our wind-down partner RSM and we believe that this is a best in class plan. We expect this will be of great comfort to investors on top of our blanket property security policy on lending nowadays and 500+ loan diversification of the loan book. RSM aren't thought of particularly well in terms of Lendy, e.g. in respect of creditors vs p2p investors, and how repayment/loan contracts fall in platform failure. Are you able to point out how the RSM management of AC would differ from what has happened with Lendy which is in wind down?
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daveb
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Post by daveb on Dec 26, 2019 20:29:44 GMT
I think it's easy to see why lending to small business could be risky. I suspect a lot of us were over confident in the valuations of property loans, clearly the development loans could go wrong but even some of the bridging loans seemed to have unrealistic valuations.
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Post by brightspark on Dec 26, 2019 20:58:49 GMT
This is a very valid point iren . Firms with very detailed and well funded wind-down plans with with serious and well prepared partners for those wind-down plans are key to the risk being reduced back to principally loan risk. We have invested substantial sums in our own systems and also in the detailed plan with our wind-down partner RSM and we believe that this is a best in class plan. We expect this will be of great comfort to investors on top of our blanket property security policy on lending nowadays and 500+ loan diversification of the loan book. It is not concerns about the stability of AC that are to the fore. It is the whole p to p industry which is wide open to every chancer about looking for rich pickings. The p to p major players as a whole could have done more and sooner to rein in the excesses exemplified by behaviours of Lendy, Funding Secure and Collateral managements. Presumably the FCA would have welcomed input whereas realistically the FCA is unable to service the whole financial services industry with concerns expressed from small investors unable to be given weight and perhaps credence. I take no comfort from 500+ loans available on the AC platform because if AC goes down, its wind-down plan may well go with it. I still do not know whether, in Administration, to a platform I am a creditor or an investor or both and I don't think our legislators know either. Some would prefer that Administrators simply sold on a loan book to another platform though how feasible this is I am not able to say. Currently the concept of ring-fencing rings hollow with Administrators regarding investors loans as eye-watering fair game.
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Monetus
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Post by Monetus on Dec 26, 2019 21:50:19 GMT
This is a very valid point iren . Firms with very detailed and well funded wind-down plans with with serious and well prepared partners for those wind-down plans are key to the risk being reduced back to principally loan risk. We have invested substantial sums in our own systems and also in the detailed plan with our wind-down partner RSM and we believe that this is a best in class plan. We expect this will be of great comfort to investors on top of our blanket property security policy on lending nowadays and 500+ loan diversification of the loan book. Can you confirm what would happen in the (hopefully unlikely) event that Assetz Capital became insolvent? On the surface it would appear that any "wind down plan" would be rendered null and void because it would be superseded by insolvency law? As others have touched upon, RSM/Baker Tilly was also backup provider to Lendy and had a wind down plan in place with them that didn't get activated as it became insolvent. Investors are now seeing huge chunks taken from their "trust asset" recoveries by RSM in order to pay creditors of Lendy Ltd in a distribution waterfall that ranks the platform's default interest ahead of investor principal. On the surface wind-down plans only appear useful in a utopian, unicorn world where platforms decide to shut down voluntarily rather than due to financial issues. I'd wager that platform insolvency is likely to be the most common reason for any P2P platform to go out of business (we've seen several already). How can we be sure that the same won't happen again here and what safeguards are in place to protect investors in case of platform insolvency?
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